Internet of Things Architecture

The Internet of Things (IoT) is the connection of devices to the internet. Devices are outfitted with sensors. The sensors gather data that reflect the human activities that are related to the devices and how the devices work. Sensors are embedded in things everywhere.

Shown below is a reference IoT reference architecture.

Smart homes with connected devices and sensors let insurance companies improve service for their policy holders while providing insight into risks in the home. By connecting home ecosystem partners, insurers, and services such as weather reporting, the IoT for Insurance solution leverages key components of the Cloud Reference Architecture. A solution like this lets the policy holder receive notification of potential danger to the home and engage with the insurer in a more proactive manner. For example, leak-detection sensors and valves could monitor for water leaks and protect the home from resulting damage. The device maker would be responsible for the life cycle of the devices and the insurance company benefits from access to the device data so it can provide an improved experience to its policy holders.

Step 1: Sensors and actuators are deployed in the home and attached to the device maker’s cloud service. The sensors can include water leak detection, water flow, and temperature, and the actuators can include automatic water shutoff valves.

Step 2: Homeowner logs in to the insurance mobile application and authorizes the insurance service to access the device maker’s (peer) cloud and their device data. The mobile application sends the authorization token and insurance company identifier to the cloud service.

Step 3: This information is used to map the user, devices, and insurance policy within the cloud service. The device cloud service is used because the device makers have already deployed into their own cloud and own the lifecycle of the device and the user experience with the devices.

Step 4: The insurance service receives information such as authorization, device details, and insurance id from the insurance mobile application and processes this in several nodes (application logic, device registry, and device data store). The devices are registered with the device registry and data mapping is updated in the application logic component.

Step 5: Insurance service application connects to the device maker (peer) cloud using the authorization token and requests the data. The application is set up to pull data on a configured interval. In addition to device data, the application can be configured to access other data sources such as a weather data service for use in analysis.

Step 6: Data from devices and other sources such as the weather service are continually updated and sent to analytics to determine if a potential risk threshold has been exceeded. This data is analyzed to determine if there is a potential for damage to the home (including water damage, freeze potential, and more). Once it is determined that there is a problem, notifications are sent to the homeowner and to the insurance company using the analysis from step 5. The homeowner can then take an action to respond to the notification and determine if damage has occurred and the insurance company can initiate a claim process.

Step 7: If damage has occurred, the insurance business process of claims management is initiated. The insurance business processes can be accomplished in the cloud service, their enterprise applications, or their mobile applications. This is dependent on how and where the insurance company decides to perform the business logic.

Here is a video showing how the Internet of Things works:

IBM Watson IoT Platform


Sensors can take many forms:

  • Devices like thermometers and accelerometers measure real-world characteristics and generate numerical information.
  • Cameras and microphones create streams of video and audio information that contain more complex information about the world.
  • Beacons and load sensors are also part of the IoT category. Actuators can take different forms, such as relays that switch equipment on or off or displays that indicate when a device reports something abnormal.

Data from sensors can provide valuable insights. To use the data, it must be transmitted, stored, analyzed, and presented in a useful way. The Watson IoT platform provides a common standard language that devices can use to communicate with the platform over the internet. After the data is received, analytics can be applied and made available to applications that meet industry-specific needs.

IoT can be applied in many ways:

  • Logistics and supply-chain management to track physical objects, such as packages and containers
  • “Smart” buildings that are monitored and have control systems to manage their operations
  • Connected vehicles that provide information to drivers on road conditions and vehicle status
  • Medical applications that allow patients to be monitored remotely
  • Retail applications that use information about a customer to tailor marketing and purchase recommendations
  • “Smart” homes that you can remotely control the heating and operation of appliances

IoT opportunity and benefits

Using the insight from IoT data represents a big opportunity and can benefit you no matter what business you are in. You’ll be able to improve engagement by providing a rich programming platform and exploring new business models with new revenue opportunities.

You can use the IoT platform for many purposes:

  • Connect and manage devices, networks, and gateways
  • Integrate structured and unstructured information from devices, people, the weather, and the world
  • Gain insights from information by using real-time streaming, predictive, edge, and cognitive analytics
  • Visualize and manage your IoT landscape end-to-end, manage risk, and gain trusted sources of IoT data with innovative technology such as blockchain
  • Automate smart processes using strength in cognitive, analytics, security, and cloud to catalyze and monetize the transformation of global technology

IoT concepts

You can get a basic understanding of how an application that uses IoT works through a simple example in a grocery store. Consider the produce section in your local grocery store. Think about what might happen if a refrigerator that contained prepared food failed. At best, the failure might cost the store money because of product loss. At worst, the failure might lead to the illness of a customer who purchased and ate spoiled food.

To use IoT to solve this problem, you might install temperature sensors in your store anywhere that food must be kept at a specific temperature. However, the sensors alone can’t solve the problem.

Imagine that you receive all the sensor information, and as you receive it, you verify that each sensor indicates a temperature within a normal range. The IoT platform can analyze the incoming data in real time, test it against the expected results, and trigger an alarm action if the sensor is out of range. Because the alerts are automated, people at the store can act quickly to keep the food from spoiling and fix the problem. The alerts can also be shown on a sensor dashboard where you can review and track all the sensor alarms from one place.